One day after reporting a slightly better number for Q2 GDP, the BEA reports today that there is little reason to suspect it was anything more or lasting. The data for Personal Income and Spending shows that the dominant condition since 2012 remains in effect – “good” quarters, or whatever passes for one these days, are the anomaly. There still is no meaningful rebound in income.
An inconvenient math for housing is beginning to dog Chicago: The third largest city in the US has been losing population for years. Not huge numbers, but it adds up… In 2016, according to the Census estimate, the population dropped by about 9,000 people. Since 2014, the population has dropped by about 14,000 people. Chicago’s fiscal woes, junk credit rating, and the threat of bankruptcy hanging over it don’t help.
Drain the “swamp”, cut the regulations, slash corporate tax rates by about 20%, kill O’care, raise tariffs on imports to reduce the trade deficit – these are all measures that were supposed to increase stagnant economic growth rates. Higher growth would then fill the malls and restaurants and make it possible to pay our debts.With the exception of the boneheaded proposal for tariff hikes from Trump’s trade czar, Peter Navarro – which would have the opposite effect – these changes might have been successful. Too bad “The Donald” has been able to fulfill so few of his campaign promises. We predicted as much. We were right. And many Dear Readers will never forgive us. They seem to think that because we saw it coming, we willed failure upon Team Trump. We deny the charge. We have no such power.
Just recently the Federal Reserve Bank of New York released its quarterly survey of the composition and balances of consumer debt. Importantly, it was the fact that total indebtedness reached a new all-time record that sent the mainstream media abuzz with questions about the economic implications. Here is the graphic that accompanied the commentary.
After 16 years of writing about it, I thought I knew a lot about the war in Afghanistan, but Scott Horton’s new book, Fool’s Errand: Time to End the War in Afghanistan, showed me how much I didn’t know – and that’s quite a bit.Did you know that the Taliban tried desperately to surrender, offering to turn over Osama bin Laden to the country of Washington’s choice – but that George W. Bush would have none of it? I didn’t.
Hurricane Harvey is predicted to be the costliest natural disaster in the history of the U.S., with a damage cost exceeding Hurricanes Sandy and Katrina. AccuWeather predicts that the damage cost will hit $160 billion. The death toll from the storm has reached at least 37 deaths by August 30. AccuWeather, a private weather firm, notes that the storm’s cost represents 0.8 percent of the national GDP, which is now at $19 trillion.
Seemingly at odds with the world, US President Donald Trump has once again raised the possibility of a trade conflict with China. On August 14, he instructed the US Trade Representative to commence investigating Chinese infringement of intellectual property rights. By framing this effort under Section 301 of the US Trade Act of 1974, the Trump administration could impose high and widespread tariffs on Chinese imports. This is hardly an inconsequential development. While there may well be merit to the allegations, as documented in the latest “USTR Report to Congress on China’s WTO Compliance,” punitive action would have serious consequences for US businesses and consumers. Like it or not, that is an inevitable result of the deeply entrenched codependent relationship between the world’s two largest economies.
Last week featured two unusual stories on gold — one strange and the other truly weird. These stories explain why gold is not just money but is the most politicized form of money. They show that while politicians publicly disparage gold, they quietly pay close attention to it.
One of the enduring mysteries for conventional economists is why wages aren’t rising for the bottom 95% even as unemployment is low and hiring remains robust. According to classical economics, the limited supply of available workers combined with strong demand for workers should push wages higher. Why have wages for the bottom 95% lost ground in an expanding economy?We can start our search for answers by looking at a chart of wages going back 44 years to the early 1970s. Note that the top 5% began pulling away in the 1980s, when financialization and globalization took off, and accelerated in the 1990s tech boom and the early 2000s housing bubble. The bottom 95% benefited from these booms, but at a much more modest level: wages for the bottom 95% almost returned to 0% gain as opposed to actual declines.
America, you’ve been fooled again. While the nation has been distracted by a media maelstrom dominated by news of white supremacists, Powerball jackpots, Hurricane Harvey, and a Mayweather v. McGregor fight, the American Police State has been carving its own path of devastation and destruction through what’s left of the Constitution.